EDPS Submissions Explained: From 837 Claims to MAO Reports

A Complete Training Guide for Medicare Advantage Data Teams

Introduction: Why EDPS Submissions Matter

Every Medicare Advantage (MA) plan’s risk score and payment accuracy depend on one thing: clean, timely encounter data.

The Encounter Data Processing System (EDPS) is how MAOs transmit encounter (claim) information to CMS for validation, storage, and use in Risk Adjustment Suite of Systems (RASS) model runs.

Understanding EDPS — along with the 837 EDI structure, acknowledgment reports (999, 277CA), and CMS feedback files (MAO-001, MAO-002) — is essential for:

Data operations teams ensuring connectivity and compliance
Risk adjustment analysts validating submission quality
Compliance and audit staff maintaining traceability across the RASS ecosystem

Part 1: What Is EDPS (Encounter Data Processing System)?

Overview

EDPS is the CMS system that processes encounter data submitted by Medicare Advantage Organizations (MAOs).
Encounter data represents adjudicated claim-level details (Professional, Institutional, and DME) from providers for MA beneficiaries.

These submissions are used by CMS to:

Calculate risk scores for payment
Calibrate and refine HCC model versions (e.g., V28)
Perform utilization, quality, and cost analyses

What Does EDPS Include?

EDFES (Front-End System)
Validates HIPAA compliance, syntax, and envelope structure before data reach EDPS. This ensures only properly formatted encounter files move forward for processing.
EDPS Core Processor
Performs business and content validation, applies CMS-defined edits, and flags preliminary Risk Adjustment (RA) indicators for eligible diagnoses and services.
EODS (Encounter Operational Data Store)
Stores all accepted encounter data after processing. The EODS is the official CMS repository used for reporting, analytics, and downstream model runs.
MAO Reports (MAO-001 & MAO-002)
- MAO-001 — Identifies duplicate encounter data detected during processing (triggered by error 98325 – Service Line(s) Duplicated). It provides detailed duplicate line items for correction or resubmission.
- MAO-002 — Provides encounter-level processing results from EDPS, including acceptance or rejection details and preliminary Risk Adjustment (RA) flags such as PA, PD, PN, or FR.

Why CMS Implemented EDPS

CMS transitioned from summary-level RAPS submissions to detailed encounter data to improve accuracy in:

Risk score calculation
Program integrity and auditability
Clinical and cost analyses

EDPS data feeds directly into the Risk Adjustment Suite of Systems (RASS), where the risk adjustment model converts diagnoses into HCCs for payment.

Who Must Use EDPS?

All organizations offering Medicare Advantage coverage, including:

MA Plans and MA-PDs
SNPs (Special Needs Plans)
Regional & Local PPOs
Employer Group Waiver Plans (EGWPs)
PACE, Cost, and MSA plans
Religious Fraternal Benefit and PSO plans

What Data Must Be Submitted?

For each plan type, CMS requires different encounter data submissions:

MA / MA-PD Plans — Must submit all adjudicated (accepted and denied) claims according to CMS specifications.
PACE Plans — Submit claims-based encounters only.
Cost Plans — Submit only Medicare-covered items or services for which costs are claimed on CMS Cost Reports.
SNPs (Special Needs Plans) — Submit Medicare services following EDS guidelines.

Submission Timelines

CMS sets specific deadlines for encounter data submissions:

Full Encounter — Must be submitted within 13 months of the Date of Service (DOS).

Correct/Replace or Void/Delete Encounter — Must be submitted within 13 months of DOS and no more than 30 days after the adjustment date.
Chart Review Encounter — Must be submitted within 25 months of the data collection period.

Setting Up EDS Connectivity

Before sending data, MAOs must:

Complete the Encounter Data EDI Agreement with CMS (via CSSC).
Establish secure connectivity using Connect:Direct, TIBCO, or Gentran.
Test and certify using EDFES test environments before production go-live.

Part 2: EDI 837 and the X12 Foundation

What Is EDI?

Electronic Data Interchange (EDI) enables the digital exchange of structured data between healthcare entities.
It replaces paper workflows, allowing providers to submit, and payers to receive, standardized claims.

What Is X12?

ASC X12 is the U.S. national standard for EDI healthcare transactions.

Common File Types:

• 837 — Healthcare Claim
Used by providers to submit Professional, Institutional, or Dental claim data to payers. This is the main file for transmitting encounter and billing details.

• TA1 — Interchange Acknowledgment
Confirms that the EDI file was received successfully and checks for envelope-level or formatting issues (e.g., ISA/GS segment errors).

• 999 — Implementation Acknowledgment
Verifies that the submitted EDI file meets syntax and structural standards. A failed 999 means the file will not move forward to claim-level validation.

• 277CA — Claim Acknowledgment
Provides business-level feedback for each individual claim — indicating whether it was accepted, rejected, or pended after processing.

X12 File Structure (Think of Nested Layers)

ISA  →  GS  →  ST  →  LOOP  →  SEGMENT  →  ELEMENT

Hierarchy:

ISA/IEA — File envelope
GS/GE — Functional group
ST/SE — Individual transaction set (one claim)
Loops (1000–2400) — Logical sections (submitter, patient, claim, service line)
Segments (NM1, REF, DTP) — Data lines within loops
Elements — Actual data fields

Example:
NM1*41*2*Health Payer System*****46*TGJ23~
→ identifies the billing provider submitting the claim.

Key Loops in an 837 File

1000 -> ASubmitter Information
1000B -> Receiver (CMS or Clearinghouse)
2000A -> Billing Provider Hierarchy
2000B -> Subscriber/Patient Info
2300 -> Claim Details
2400 -> Service Line Details

End-to-End Claim Flow

837 claim is submitted by MAO or clearinghouse
TA1 confirms receipt and envelope validity
999 validates syntax and structure
277CA provides claim-level acceptance or rejection status
MAO-001 / MAO-002 reflect EDPS and CMS processing outcomes

Part 3: Understanding 999 and 277CA Acknowledgments

999 — Functional Acknowledgment

Confirms structural validity of an EDI 837 file.

Key Segments:

AK1 / AK2 -> Group & Transaction Acknowledgment
IK3 / IK4 -> Identify segment and element with errors
IK5 -> Final acceptance code (A = Accepted, E = Accepted w/Errors, R = Rejected)

Remember:
If your file fails at the 999 stage, it never reaches CMS for adjudication.

Common 999 Errors:

Invalid ISA/GS control numbers
Mismatched ST/SE pairs
Invalid NM1 or CLM segments

277CA — Claim Acknowledgment

Tracks each individual claim within a submitted batch after syntax passes.

Key Codes:

STC Code Meaning
A1 -> Acknowledged
A2 -> Accepted w/ Errors
A3 -> Rejected
P0 -> In Process
F1 -> Finalized – Paid
F2 -> Finalized – Denied

Common Issues:

Missing provider numbers (21)
Invalid diagnosis codes (187)
Duplicate claims (42)
Rendering provider not enrolled (85)

Why 999 & 277CA Matter

Early error detection = fewer denials
Real-time visibility into claim movement
Foundation for EDPS compliance

Best Practices

Automate parsing and alerts for 999/277 responses
Track rejection trends by error code
Map TRNs to original claim IDs for quick troubleshooting

Part 4: MAO-001 & MAO-002 — CMS Response Reports

MAO-001 – Encounter Data Duplicates Report

The MAO-001 identifies duplicate encounter data submitted by MAOs to CMS.
It is triggered whenever a 98325 – Service Line(s) Duplicated error appears on your MAO-002 report.

Although not a direct risk-adjustment file, it ensures data integrity by flagging duplicate encounters that could distort payments.

Purpose

Lists duplicated ICNs and service lines.
Helps MAOs reconcile and correct duplicate records via void or replace transactions.
Maintains clean encounter data for risk-adjustment accuracy.

File Structure

Section Description
Header (000) -> Report metadata – MAO contract ID & generation date
Detail (001-xxx) -> Duplicate ICNs, service lines, original accepted references
Error Codes -> Always includes 98325 (Service Line Duplicated)
Trailer (999) -> Totals for duplicates and service lines

How to Use

Match 98325 errors from MAO-002 to entries in MAO-001.
Validate true vs. false duplicates.
Resubmit corrected void/replace transactions (837 frequency 7 or 8).
Investigate systemic duplicate creation issues.

Why It Matters

Prevents duplicate encounter counting.
Protects RAF and payment integrity.
Keeps audit trail clean and CMS-compliant.

MAO-002: Encounter Data Processing Status Report

Once your data passes EDFES, it moves into EDPS.
The MAO-002 shows what CMS accepted or rejected after business rule and RA validation.

What’s Inside the MAO-002

Field Purpose
Header Record (000) -> File metadata and interchange ID
Detail Records -> Encounter ICN, Contract ID, Line Status
Error Codes -> Rejection or informational flags
RA Flag -> Preliminary RA eligibility: PA, PD, PN, FR
Trailer -> Totals of submitted, accepted, rejected

Error Code Examples

Code Description
502 Invalid Type of Bill
507 Invalid Diagnosis for DOS
545 Invalid Provider Taxonomy
802 Duplicate Encounter
650 Chart Review missing link
504 CPT/HCPCS not allowable

-> Review both “Accepted with errors” and rejected lines — they can still affect downstream RA scoring.

RA Flags

Flag Meaning
PA Preliminary Allowable (may risk-adjust)
PD Preliminary Disallowable
PN Not Applicable
FR Final Reject
Blank RA not applied

Using MAO-002 Strategically

Validate accepted encounters and error trends
Identify coding or data patterns affecting risk scores
Track RA-eligible diagnoses ahead of MAO-004
Monitor provider-specific rejection clusters

MAO-001 vs MAO-002: At a Glance

Feature MAO-001 MAO-002
Purpose Duplicate encounter report Encounter-level processing status
Trigger 98325 error on MAO-002 After EDPS processing
Includes RA info ❌ ✅
Timing After MAO-002 if duplicates exist 1-3 days post submission

Part 5: How It All Fits Together

Complete EDPS Lifecycle

837 Claim File
   ↓
TA1  (Envelope check)
   ↓
999  (Syntax/Structure)
   ↓
277CA (Claim-level status)
   ↓
MAO-001 (Front-end acceptance)
   ↓
EDPS Processing
   ↓
MAO-002 (Encounter-level acceptance)
   ↓
MAO-004 (Final RA/Payment reconciliation)

Each stage builds validation confidence — from structure → content → payment readiness.

Part 6: Best Practices for MAOs & Submitters

1. Automation & Monitoring

Parse 999/277/MAO files automatically into a central repository
Track ICN continuity from submission to payment

2. Error Management

Build dashboards for error frequencies
Trend by provider, diagnosis, or error code

3. Operational Governance

Maintain audit trail linking 837s to MAO-002 and MAO-004
Validate chart review linkage before submission

4. Timeliness

Adhere to 13-month and 25-month deadlines
Monitor CMS “cleanup runs” or system announcements

Appendix: Quick File Reference

File Purpose Generated By
837 Claim/Encounter submission MAO / Provider
TA1 Envelope acknowledgment Clearinghouse / CMS
999 Syntax/structure acknowledgment CMS EDFES
277CA Claim acceptance/rejection CMS EDFES
MAO-001 Front-end processing summary CMS EDFES
MAO-002 Encounter processing & RA feedback CMS EDPS
MAO-004 Final RA and payment-level reconciliation CMS RASS

Conclusion

The EDPS ecosystem is the lifeline of Medicare Advantage payments.
From the first 837 submission to the final MAO-004 reconciliation, every file — TA1, 999, 277, MAO-001, MAO-002 — tells part of your story.

By mastering each stage:

You reduce rejections and resubmissions
Improve encounter completeness
Strengthen audit defensibility
Protect risk score accuracy and revenue integrity

“In risk adjustment, every record counts — but only accepted encounters pay.”